The product mindset pillars:
- outside-in – an obsession with the customer (developers and end users)
- time to market – get to market early with an MVP, and then rapidly iterate based on developer feedback
- iteration –
To define the right metrics, here are some of the typical questions that an API product manager with a customer-first, outside-in focus would ask:
• “How often is the API called?” This is a measure of how often a developer leverages the API and can indicate often the business’s value proposition is presented to users.
• “What kinds of calls are being made?” Different API calls have different value for both the API provider and its consumers. For example, if the value measure is direct monetization, a call to the provider’s API to retrieve product information is less valuable than one that actually places an order for the provider’s goods or services.
• “Are developers changing their behavior?” Developer consumption metrics can provide insight into the periods when API users are most active and whether engagement is increasing or decreasing.
Your API Monetization Checklist
We created this checklist to make it easy for you to figure out if you are able to monetize your API quickly. A Yes or a Maybe is certainly worth considering:
- Are you able to profit from charging for your API directly?
- Can giving access to your API be an upsell opportunity?
- Are there ways to drive revenue indirectly through your API?
- Do you have opportunities to make strategic API partnership?
- Can an API improve operational efficiency and decrease time to market?
Then, as you implement an API monetization strategy there are two questions to constantly keep on your mind:
- Are you measuring Average Revenue Per User (APRU) throughout each possible API-related revenue source?
- Are you comparing this APRU with the APRU of customers who don’t use your API?
As with anything, make sure that your API monetization strategy is directly in line with your business objectives. If it’s clearly not, don’t waste your time.